Apple Seeks Suppliers In India, Japan And South Korea For Key iPhone, iPad Components Amid Chinese Import Delays

Apple is reportedly seeking new suppliers from India, Japan, and South Korea who can deliver vital components to its contract manufacturers located in India.

The delay in government approvals for imports from current suppliers, mainly from China, has led to this situation. These imports consist of batteries, camera lenses, chargers, and other necessary equipment for the production of Apple's leading iPhones and iPads in India, Economic Times reported citing people aware of the matter.

In January, around 17 Chinese firms, which provide parts for Apple's devices, sought government approval to establish manufacturing units in India.

Initial approval was given to fourteen applications. However, the proceedings for four of these companies have been indefinitely postponed, and six have communicated to the government their lack of interest in manufacturing in India.

“The approvals (in January) were only initial approvals. Because most of these companies have Chinese origin, national security is also an issue. Those approvals have to be carefully given. Issues of environmental clearances, which are a state subject, are given by expert committees,” a senior government official was quoted as saying in the ET report.

The group of 14 encompasses companies such as Sunny Optical Technology Group, a manufacturer of camera lens equipment, and Han's Laser Technology Industry Group. It also includes Luxshare-ICT, the maker of airpods, and ON Semiconductor Shenzhen China, a capacitor chipmaker.

Due to delays in approvals, Luxshare-ICT relocated its production facility to Vietnam.

However, another government official was quoted in the ET report as saying, “It is wrong to say we have turned down the application of any of these companies. All government approvals have to be given after careful consideration of all factors.”

Due to delays in imports caused by pending approvals at both central and state levels, Apple is now seeking suppliers capable of establishing "just-in-time" supply chains in India to speed up local production.

According to industry experts, the majority of Apple's component suppliers are based in China, and due to the current tensions at the India-China border, it is improbable that they will receive swift governmental approvals.

A senior industry executive expressed that some of these firms, despite being critical component suppliers yet smaller in the global market, may not gamble on investing in a potentially hostile country, even with the necessary approvals. They likely reassessed the risks.

The delays have forced Apple to undertake exploratory level talks with companies based in India, Taiwan, Japan and South Korea for vital components such as batteries, chargers, casing units, cables and others.

Japan-brd TDK will manufacture lithium-ion battery cells at a new plant in Haryana, IT minister Ashwini Vaishnaw said on Monday.

Throughout the years, Apple has progressively intensified its efforts to establish manufacturing operations in India, aiming to broaden its supply chain beyond China.

Tata Electronics, presently the sole Indian supplier to Apple, is intending to nearly double the capacity of its iPhone casing facility.

Several of Apple's major electronics manufacturing services (EMS) providers, including Foxconn, Pegatron, and Wistron (which has now been acquired by Tata Electronics), are located in the country.

Analysts believe that Apple's actions in India align seamlessly with its overall approach, which typically involves establishing assembly units in the initial stage, followed by the introduction of specialised component suppliers.

However, the manufacturer of the iPhone could encounter challenges in finding alternatives to Chinese suppliers for certain components like camera lenses. These are highly technical and demand exceptional and precise engineering.